Scientific research and education sectors may take a hit as the prices of scientific equipment and teaching learning materials have gone significantly up following the rollout of Goods and Services Tax (GST).

With instruments used in scientific laboratories attracting 28 per cent GST from earlier 5 per cent and speciality chemicals used for research now being taxed at 18 per cent, research institutes may have to spend much more for procuring hardware and consumables like chemicals.

Similarly affected are those who make educational aids. “Earlier, we used to pay only 5 per cent VAT. Now, we have to pay 18 per cent GST on most of our products as they are clubbed with toys,” said a person working with a social enterprise in Delhi which has been instrumental in bringing about a change in the way mathematics is taught in schools.

Similarly hit are domestic scientific instrument manufacturers.

“GST was supposed to make life easier for companies in India. But it does not seem to be doing this at all in our case,” said Deshdeep Sahdev, who founded New Delhi-based Quazar Technologies Private Ltd, perhaps the only domestic firm that makes sophisticated scientific instruments such as scanning tunnelling microscope in India.

“Sophisticated scientific instruments are a heady blend of mechanical and optical parts, electronics and software. Hardware, up to now, was subject to VAT or CST of 12.5 per cent and software to 5 per cent. Not any more. These rates have been hiked to 28 per cent and 18 per cent respectively,” said Sahdev, who quit his job as professor of physics at IIT Kanpur to set up Quazar.

Companies such as Quazar are also at a disadvantage over their competitors who get a customs duty exemption for selling imported equipment to reputed institutes such as IITs and IISc.

“GST will give a minimum advantage of 15.5 per cent to foreign companies making all their goods outside India and as much as a 13 per cent boost to those writing software abroad,” Sahdev said.

“We make cutting-edge scientific instruments indigenously. Our company is the ultimate embodiment of the Make in India spirit. It is difficult to see how this facilitates the development of an indigenous hi-tech base for the growth of science and technology in India,” he rued.

Scientists are also concerned. “Equipment and consumables account for 65 to 70 per cent of a research project in the field of life sciences. For instance, I have received a research grant of ₹75 lakh of which ₹49 lakh will go towards purchase of new instruments and consumables like chemicals,” said a biology researcher at IIT Kanpur.

While the instruments may be costlier by 23 per cent, scientists may have to cough up an extra 13 per cent for most consumables used in the lab.

“My concern is that how will I carry out this study as the funds would surely fall short. My project was approved in end June, just before GST came into being. With increase in taxes, the expenditure is sure to go up,” he said.

Authorities at the Indian Institute of Science, Bengaluru, however, said it is difficult to quantify the impact as yet. “We are in the process of finding that out,” said an IISc official said.

One way to get out of this imbroglio is to make national research facilities GST-exempt, the IIT Kanpur professor suggested.

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